White House Economist Highlights Strong Jobs Report: 'Economy Continues On A Strong But Stable Course'

Zinger Key Points
  • NEC director Lael Brainard praised Joe Biden's economic plan amid rising inflation and budget deficits.
  • Brainard blamed Trump administration tax cuts for the United States' ballooning national debt.

National Economic Council (NEC) director Lael Brainard appeared on CNBC Friday morning, touting President Joe Biden‘s economic plan amid budget concerns and new job data.

Nonfarm Payroll Data: The Bureau of Labor Statistics reported nonfarm payrolls had increased by 272,000 in May, far above estimates of 182,000. Unemployment rates rose by 0.1%. The report sows uncertainty about the likelihood of sooner rather than later Federal Reserve interest rate cuts.

“It’s a good jobs report for American workers,” Brainard said. “It suggests that the economy continues on a strong but stable course. So generally speaking, good news.”

Brainard reacted to mixed signals after the household survey found a 400,000 subtraction in jobs, a slight increase in unemployment and a shrinking labor force.

“There’s some churn in those that is perhaps related in particular to workers in the 20 to 24 age bracket who may be transitioning into the job market during this time of year. I think it’s a little too soon to tell,” Brainard said. “If you look at the unemployment rate under President Biden, the unemployment rate has now been at or below 4% for 30 months—2.5 years—that’s the longest stretch in 50 years, so we continue to see very low unemployment.”

Rate Cut Optimism: Amid an uptick in wage growth, Brainard is still optimistic about the potential for future Federal Reserve interest rate cuts.

Brainard is encouraged by a low recent Personal Consumption Expenditure (PCE) inflation report of 2.7%, close to the Federal Reserve’s 2% target.

She also noted that the progress in bringing down inflation is comparable to the United States’ G7 peers who have recently cut rates.

Passing the Buck: When asked about the narrative of government deficits, inflation and fears of a recession, Brainard blamed former President Donald Trump.

“That’s interesting, that’s not actually the narrative—the narrative is that the [Trump] tax cuts ballooned the deficit by $2 trillion and produced very little in terms of any additional investment or growth,” Brainard said. “If you look at contributions to the deficit, the large contributions came under the previous president. This president has presided over a period where deficits have come down.”

Brainard stated that the government needs to increase tax revenues as a share of GDP to fall in line with historical levels to fund critical programs such as Social Security. Brainard said that corporations and the wealthy need to “pay a fair share” to give working Americans a “fair shot.”

Also Read: Biden Chief Economic Advisor Promises Relief For Middle Class, Sets Sights On Overturning Corporate Tax Cuts: Report

Photo: Shutterstock

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